IndiaMART InterMESH Ltd. share price target

We assign 45x to the company's FY24E earnings of Rs 150 to arrive at the target price of Rs 6,800/share, implying an upside of 52% from the CMP.

IndiaMART's 3QFY22 performance was weaker than expected led by lowerthan-anticipated revenue growth (at 8.4% YoY) and paid suppliers (up 6K QoQ, +5% YoY). Moreover, EBITDA margin (at 41.9%; down 370bp QoQ) contracted as employee cost shot up 25% YoY due to wage hikes and increased onboarding, while ARPU dipped 0.8% QoQ owing to higher share of suppliers within the lower value package, as business normalized. Conversely, collections remained encouraging at +25% YoY, suggesting good visibility on FY23 revenue growth. Similarly, deferred revenue also increased 25% YoY, which should support 20%+ revenue growth in FY23....

Q3 revenue up 3% QoQ, short of our estimates due to weak ARPU growth

Stock looks attractive following ~25% correction from its Oct'21 peak upgrade from HOLD to BUY with unchanged TP of Rs 8,430

Q2 performance in line as sales grew 12% YoY and EBITDA margin stood at 46%

IndiaMART delivered in line revenue and margin performance in 2QFY22. Paid suppliers increased by 4k (+3% QoQ and 6% YoY), while ARPU dipped by 2.6% QoQ due to a higher share of suppliers within a lower value package. Collections surged by 31% QoQ and 37% YoY, providing visibility on its near term revenue performance. We expect collections to continue to trend higher in coming quarters. Deferred revenue is up 4% QoQ and 20% YoY, which provides better visibility on FY23 revenue. Margin was in line, with EBITDA margin at 45.6% (est. 45.6%). Sequentially,...

Pandemic-led boost to INMART's outsourced client acquisition model (DSA-based) has improved sales engine efficiency

IndiaMART delivered in-line revenue performance in 1QFY22. The number of paid suppliers fell by 6k, impacted by lockdowns amid the second COVID wave. On the other hand, ARPU surged 5.8% QoQ on higher churn in lowpaying silver monthly suppliers. The decline in collections was restricted to 38% QoQ v/s a 53% QoQ drop in 1QFY21. The sharp rebound in FY21 collections (post the drop in 1QFY21) reassures us of a quick rebound in...

IndiaMART delivered strong operational performance during 3QFY21, led by robust increase in paid suppliers (at 7k v/s their target range of ~5k). Collections were up 9% sequentially but flat on a YoY basis. Margin showed great resilience, with the company reporting the highest...

IndiaMART posted a strong operational performance in 2Q, primarily led by a quicker-than-anticipated rebound in paid suppliers. Collections were up 73% sequentially, reaching 94% of pre-COVID levels. The company also showed great resilience in margins, curtailing its operating cost to INR815m, v/s an average quarterly run-rate of ~INR1.2b. This led to EBIT margins of 47%, v/s 23% in FY20. While we concur that margins are not sustainable at current levels, overall the company would see benefit from cost optimization and operating leverage....